Real income

Income which has been restated to exclude the effects of inflation.

When the rate of inflation exceeds the rate of increase - if any - in incomes, real incomes fall.

Real incomes squeeze

"Unless wages begin to accelerate in line with the inflation pick-up - unlikely, but not impossible - households will see real incomes squeezed this year. Households could turn to credit and begin to draw down on savings to maintain their preferred level of consumption."

The Treasurer magazine, March 2017, p17 - Kallum Pickering, senior UK economist, Berenberg Bank.

See also

• Inflation
• Real
• Real rate
• Income
• Nominal
• Treasury inflation-indexed securities